Property Assessed Clean Energy (PACE)
is an innovative financing tool which completely blows away the money barriers that prevent owners from upgrading their buildings to be more energy efficient (even to NET Zero!) and to installing renewable energy systems.
PACE financing programs cover 100% of the upfront costs of property improvements that increase energy efficiency and/or generate renewable energy, with no government grants or subsidies required. PACE financing is repaid through a voluntary special property tax assessment. This arrangement results in fixed rate, long term affordable payments over the expected life of the improvements, and permits the payment obligation to be transferred to a new owner on resale.
PACE has already proven how well it can work (when properly structured) with over 6 Billion dollars invested and over 220 thousand homes and commercial properties upgraded and over 45,000 jobs created since 2013 in the USA. BUT to date, delivery of PACE programs in Canada have been significantly limited in scope and impact, with fewer than 5000 homes upgraded in 5 provinces in the same time frame.
Why is Canada so slow to embrace PACE?
Many factors have contributed to the Canadian PACE experience, but they all come down to one key point: the existing PACE programs have failed to support all of the stakeholders' needs.
For PACE programs to perform best, all stakeholders must be motivated to actively participate and win. For that, they need well written enabling legislation which permits them to cooperatively work together to meet their own needs. These stakeholders are:
- private capital investors: who are seeking long-term secure investments
- municipalities: who want to create jobs and green their communities with the least amount of administrative cost and overhead
- contractors: who want to be able to enhance their business by providing a PACE financing option to their customers
- consultants: who want to expand their business by actively engaging in identifying and developing eligible PACE projects
- homeowners: who want to improve their comfort and health, reduce their energy bill, increase their home's property value, and/or reduce their environmental footprint
- commercial property owners: who are interested in enhancing the value/productivity of their business/operation
Canadian PACE programs have seriously underperformed, and thus PACE is undervalued and goes unrecognized as the job creation and climate change powerhouse that it has proven to be.
On the other hand, in those states in the USA where the PACE legislation is well written, a vibrant PACE ecosystem has emerged, the program thrives, tens of thousands of jobs have been created, and PACE is making serious progress in tackling the Climate Change challenge.
AMERICAN PACE STATISTICS
PACE Alberta has examined the PACE programs in Canada and determined that their poor performance is due to the legal, administrative, and financial constraints which are embedded in each province's PACE enabling legislation and program.
These constraints have resulted in:
- greater perceived risk and cost to municipalities
- an unfavourable environment for private capital to participate
- disincentives for contractors and consultants to promote PACE to their clients
- unnecessary limits on eligible projects and program financing for building owners
- costly bureaucratic overhead
Armed with this understanding, we believed that Alberta could get PACE right if the politicians and bureaucrats were simply provided with the proven fundamentals of a best practice PACE program. For three years we gathered information, attended the national PACE conference, and, through our website, public presentations, and numerous meetings with senior politicians and bureaucrats, made the case for a best-practice PACE program.
PACE Alberta’s education and promotional efforts resulted in PACE enabling legislation being passed in 2018. However, the drafters of the legislation believed that Canadian and provincial legislation prohibited them from modeling the Alberta legislation on the best practice and experience from the USA. Consequently, the resultant legislation has many restrictions and structural issues. We circulated the legislation to our PACE network in the USA where PACE programs are growing exponentially (see for yourself the USA PACE data), and the feedback confirmed our concern that it will seriously underperform, and may fail altogether.
We had projected that with good legislation, the PACE program would gradually ramp up to having a minimum of 2% of Alberta's building owners access PACE financing each year, injecting nearly 2 billion dollars per year into the economy in energy efficiency and renewable energy improvements. This level of new capital investments would have created over 16,000 jobs per year, and seriously reduced our carbon footprint. Under the current PACE legal structure however, we will be lucky to see 10% of that impact and PACE will fail to effectively address climate change.
Here’s what we’re doing about it
Our legal network has advised us that the best way to overcome the perceived legal issues being put forward as the reasons we can't have a powerful PACE program as they have in the USA (and will soon have Europe-EuroPACE) is for PACE Alberta to commission a Canadian Best Practices PACE White Paper.
The White Paper will:
- document what a robust and thriving PACE eco-system derived from proven best practices should look like in Canada
- identify the essential elements of an effective legal framework for such a PACE program
- identify any legal constraints, starting at the constitutional and federal level and drilling down to the provincial level
- create a legal guideline which all Provinces and Territories could use to develop a robust and successful PACE program
For this tool to have the most credibility and respect, we must engage the services of an experienced and recognized legal team. The result of their work will be published and made publicly available at no cost.
How will your help make a difference?
While PACE Alberta is currently a volunteer organization with no current source of income, we have accomplished a lot in a relatively short time. But now we need money to finance the development of a strong and credible legal roadmap (the PACE White Paper). We have already received support and expressions of interest from Alberta, British Columbia, Ontario, and Quebec.
Our most current estimates suggest that we will need $75,000 to ensure that we cover the legal research and publishing costs, and the additional work that we anticipate will be required by PACE Alberta's team and consultants.
In the race towards a sustainable future, PACE is a proven tool that will dramatically help us get over the goal line as quickly as possible. Your donation will help make PACE a success in Canada.
Perks for supporting PACE?
Your name and contribution category will be publicly acknowledged and posted on our website (unless you request anonymity).
Surplus funds will be used to further PACE Alberta's long term goals:
- to create a sustainable future by making energy efficiency and renewable energy improvements affordable to all Albertans and Canadians
- to create a Canada wide PACE advocacy and education organization
And when PACE in Canada becomes the economic and sustainability powerhouse that it should be, you will know that you helped.
One more thing...
In addition to your donation, any help spreading the word will also make a difference.
Support our social media presence:
- Visit our Facebook page, like, follow, and share our page and our
- Visit our LinkedIn page, connect with us, and like, comment and share our posts, and follow #pace4canada
- Follow us on Twitter and retweet and like our posts (@PACE_Alberta).
- Become a personal supporter on our website if you are not already one. If you represent a business, become a corporate supporter to see your logo and your quote on our website. It's free!
Promote our hashtag #pace4canada
Help raise awareness and support for PACE. Write your own posts and stories about PACE and the PACE crowdfunding campaign, and include the hashtag #pace4canada.
At PACE Alberta, we are always looking for volunteers to join a great team to lead the PACE4CANADA initiative.
Interested? Give us a call at 780.482.5467
We look forward to hearing from you.